The UK government has watered down its proposals to tax inherited agricultural assets.
At last year’s Budget, ministers said they would impose a 20% tax on inherited assets such as machinery and land worth more than £1 million from April 2026.
The threshold has now been increased to £2.5 million.
- “Dad takes home less than the average living wage and has no pension.” How will Labour’s controversial inheritance tax scheme really impact farmers?
- Tractors on the streets of London – this is why furious farmers are protesting across Britain
Environment Secretary Emma Reynolds said: “We have listened closely to farmers across the country and we are making changes today to protect more ordinary family farms.”
“It's only right that larger estates contribute more, while we back the farms and trading businesses that are the backbone of Britain's rural communities.”
The initial threshold of £1 million was met by wide-scale, regular protests from farmers – many outside Parliament – with people such as Jeremy Clarkson showing support for farmers.
This decision comes after a government-commissioned report was published on Thursday 18 December, which found that farmers were “bewildered and frightened” over proposed changes that were announced in the Budget.
Baroness Batters, who led the report and is a former president of the NFU, wrote: “Nearly all the responses to this review have cited Inheritance Tax as the single biggest issue regarding farming viability that they face.
“The farming sector is bewildered and frightened of what might lie ahead.”
Top image: a tractor crosses Westminster Bridge during a protest on 26 November 2025, in London
